AI to fight dis­rup­tive in­no­va­tion - CTBC Bank

Observer on Saturday - - News -

CTBC Bank Vice Chair­man Mor­ris Li pointed out that ar­ti­fi­cial in­tel­li­gence (AI), blockchain and bio­met­ric will be the three most in­flu­en­tial tech­nolo­gies for the fi­nan­cial in­dus­try as well as the key to face the chal­lenge of dis­rup­tive in­no­va­tion.

Speak­ing at a panel dis­cus­sion at the World Congress on In­for­ma­tion Tech­nol­ogy (WCIT) 2017, the first held in Tai­wan in 17 years, Li said that the big­gest case of dis­rup­tive in­no­va­tions — in­no­va­tions that cre­ate new mar­kets or val­ues that dis­rupt ex­ist­ing ones — in re­cent years take place in China.

Chi­nese fi­nan­cial in­sti­tu­tions have long en­joyed sta­ble and am­ple prof­its thanks to the coun­try's rapid eco­nomic growth, he pointed out.

“At the same time, the de­vel­op­ment of per­sonal fi­nance has been re­stricted by China's size and the higher rel­a­tive prof­itabil­ity of in­sti­tu­tion fi­nance, leav­ing many yet to be ser­viced by banks in the coun­try. The ad­vent of dig­i­tal fi­nance, how­ever, sub­verted the en­tire fi­nan­cial mar­ket, with non-fi­nan­cial in­sti­tu­tions pro­mot­ing the de­vel­op­ment of in­clu­sive fi­nanc­ing busi­ness. For ex­am­ple, Alibaba cre­ated Ali­pay at first as a way to fa­cil­i­tate pay­ment at its Taobao on­line store and solve the trust is­sue.

Yet as the clien­tele ex­pands, it ex­tended the busi­ness to wealth man­age­ment, con­sumer loans, credit rat­ing, P2P money trans­fer and even mo­bile pay­ment, in­fil­trat­ing many as­pects of life for the Chi­nese pub­lic and erod­ing busi­nesses for tra­di­tional banks, which are even forced to lower prices in re­sponse, Li said, adding that sim­i­lar cases can be seen in emerg­ing economies with a large pop­u­la­tion such as In­done­sia and In­dia,” he re­marked.

Money trans­fer

Li said banks should use AI, blockchain and bio­met­ric to face the chal­lenge of dis­rup­tive in­no­va­tions. These tech­nolo­gies can be utilised in cus­tomer service, wealth man­age­ment, and risk man­age­ment, Li pointed out.

“The use of AI in smart and au­to­mated wealth man­age­ment opinion gen­er­a­tion and clients’ in­vest­ment man­age­ment can lower la­bor cost for fi­nan­cial in­sti­tu­tions. The gen­eral pub­lic can also en­joy bet­ter wealth man­age­ment ser­vices such as fraud de­tec­tion and risk man­age­ment us­ing big data and AI. The blockchain is mainly used in cross-bor­der trans­ac­tions in­clud­ing global trade fi­nanc­ing, cross-bor­der money trans­fer and cur­rency trade in­clud­ing dig­i­tal cur­ren­cies such as bit­coins,” Li said.

He stressed that tra­di­tional banks much in­te­grate rapidly and ap­ply new tech­nolo­gies to the in­dus­try to fo­cus more on cus­tomer ex­pe­ri­ence and com­pre­hen­sive dig­i­tal­i­sa­tion en­hance­ment. He said tra­di­tional bank branches and hu­man re­sources can be re­al­lo­cated to sales and con­sul­ta­tion ser­vices.

At the dis­cus­sion - mod­er­ated by Greg Unsworth, Risk As­sur­ance and Dig­i­tal Busi­ness Leader at PWC Sin­ga­pore and par­tic­i­pated by Nigel Ja­cob, co­Founder of Bos­ton Mayor's Of­fice of New Ur­ban Me­chan­ics, Stephen King, part­ner at Omid­yar an Ming-Kai Tsai, chair­man of Me­di­aTek - Li called on the gov­ern­ment to es­tab­lish sound reg­u­la­tions, en­vi­ron­ment and in­fra­struc­ture to en­cour­age in­no­va­tion.

For ex­am­ple, Sin­ga­pore and the UK have re­laxed reg­u­la­tions to set up a flex­i­ble "sand­box" ap­proach to fin­techs reg­u­la­tions.

FO­CUSED: A sec­tion of del­e­gates at the con­fer­ence.

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